US Cabot reports 55% drop in pre-tax income

23 January 2008 22:47  [Source: ICIS news]

HOUSTON (ICIS news)--US carbon-black producer Cabot reported on Wednesday a pre-tax income of $34m (€23m) for the final three months of 2007, down 55% from $75m reported during the same time in 2006.

The drop came as net sales failed to keep up with costs, according to the company.

Cabot reported net sales of $711m in the final three months of 2007, compared with $655m in 2006. Cost of sales, were $594m during the last three months of 2007, compared with $506m during the same time in 2006.

The last three months of the calendar year represent the first quarter of Cabot's fiscal year.

"Although we were not satisfied with our operating results for the first quarter, when taking all factors into consideration, we believe the performance was solid," according to a statement issued by Patrick Prevost, Cabot's president.

For the company's carbon-black segment, Cabot was able to increase volumes during the final three months of the year, Prevost said. However, the company did not make timely adjustments to its supply contracts, causing raw-material costs to squeeze margins.

The company's inkjet-colourant product line continues to perform weakly, Prevost said. While the inkjet aftermarket improved, it was offset by weakness in small-office and home-office markets.

The company's metal-oxides segment performed well, and Cabot's efforts to expand into new geographic markets are paying off, Prevost said.

Cabot's supermetals segment continues to face a great deal of competition, and the company is looking for additional ways to cut costs in the unit, Prevost said.

Cabot's specialty-fluids segment had a strong quarter, and opportunities are opening up for the unit that are outside of the North Sea, he said.

($1.00 = €0.68)

By: Al Greenwood
+1 713 525 2653

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